14 1 point stions MC 24 20L si6 12 ATC 2 MR 50 100 Quantity

14 (1 point) stions MC $24-- 20----L si6-- $12 ATC 2 MR 50 100 Quantity The above graph represents a competitive price searcher firm in the short run. Assuming the firm is trying to maximize profit (or minimize his losses), what price should this firm charge? $10 $15 $20 $24 thine to Save

Solution

A competitive price searcher firm\'s profit maximizing condition is Marginal Revenue(MR)= Short run marginal cost(MC) .

Here, the firm is the competitive price searcher firm in the short run . Therefore, here at MR=MC , the corresponding profit maximizing price is $24and the firm is in short run (where it can incur positive or negetive economic profits) and here, at price $24 the firm incurs economic profit . [ NOTE: A competitive price searcher firm incurs positive or negetive economic profits in short run but in the long run it incurs zero economic profit after all the adjustments in the set up is dine. ]

THEREFORE ANSWER $24 IS THE CORRECT OPTION .

CORRECT ANSWER : $24